Small lender access to the secondary mortgage market is vital to ensuring the housing finance market benefits consumers, CUNA Senior Director of Regulatory Advocacy and Counsel Elizabeth LaBerge told a Federal Housing Finance Agency (FHFA) listening session Thursday.

“The secondary market must be open to lenders of all sizes on an equitable basis. CUNA understands that the users of a secondary market will be required to pay for the use of such market through fees, appropriate risk premiums and other means,” she said. “CUNA thanks the FHFA for formally ending mortgage volume discounts in 2019 and it is critical that guarantee fees or other fees/premiums should never have any relationship to lender volume going forward.

“Additionally, CUNA would caution against regimes that require lenders to retain significant amounts of risk beyond that represented by actuarially appropriate guarantee fees, as these risk retention arrangements may have a disproportionately negative impact on small lenders that are less able to manage such risk and could therefore result in less consumer choice,” she added.

LaBerge also called on FHFA to continue to keep small lender access “top of mind” to ensure the housing finance market continues to operate to the benefit of American consumers.

• Urging FHFA and Fannie Mae/Freddie Mac to increase its focus on affordable housing;
• Asking FHFA to reconsider its use of area median income in qualifying benchmarks for it affordable housing programs;
• Calling on FHFA and the Treasury to carefully consider the effect of the 7% cap on financing of non-owner-occupied homes and second homes, as it may increase the cost of financing affordable rental housing;
• Calling on the FHFA to expand the use of drive-by appraisals to address the health and safety concerns of borrowers and provide flexibility wherever possible; and
• Asking FHFA to consider a program to ensure the smallest credit unions can safely access the liquidity of the secondary market.